Berkeley Resources announces Salamanca I progress

Berkeley Resources (BKY) updated investors on its Salamanca I uranium project and the Enusa joint venture project as it published its quarterly activities report to December 2011.

"Berkeley has continued to focus on delivering the standalone Salamanca I project as a priority," the company said. In October, Berkeley initiated the licensing and permitting processes for development of Salamanca I's first deposits, Retortillo and Santidad, with a co-operation agreement signed with the local municipalities. Construction is expected to commence mid-2013, with first production anticipated in 2014.

According to the preliminary feasibility study results for stage I of the 100%-owned Salamanca 1 project, 11.5 million pounds (mlbs) of uranium is expected to be produced in the first six years of the mine, whose life is anticipated to be 10 years.

Additionally, the company confirmed that discussions with Enusa Industria Avanzadas regarding the development of the Enusa joint venture project were continuing. Berkeley has extended the deadline for the formation of Newco, which will be 90% owned by Berkeley, to 29 February, following the recent change in government in Spain.

The incorporation of Newco will trigger the payment of €20 million (c£16.8 million) to Enusa within 30 days of formation. Newco will be responsible for exploitation of the uranium resources within the mining domain.

A new chief financial officer, Steven Turner, was appointed effective December 12, 2011. Turner brings nearly 20 years of debt and equity markets experience in the natural resource sector, said the company.

At the end of the year, Berkeley held cash balances of AU$43 million (£29.1 million).

For an understanding of what to look for when considering exposure to the sector, read: Analysing... Miners.